EXHIBIT 10.17
LONG TERM AGREEMENT
This long term agreement (hereinafter "Agreement") is entered into by and
between Boeing Satellite Systems International, Inc. (hereinafter "Buyer",
"BSSI" or "Boeing") and CopyTele, Inc. (hereinafter "Seller").
Buyer and Seller agree that this Agreement shall be effective for a period of
three (3) years commencing on April 2, 2004.
Subject to the terms and conditions specified herein, Buyer hereby agrees to
purchase and Seller agrees to sell the parts identified in Exhibit A
(hereinafter "Parts").
The following Exhibits are an integral part of this Agreement and are
incorporated herein by this reference:
EXHIBITS: TITLE:
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Exhibit A Parts List
Exhibit B Purchase Order Attachments
Exhibit C Technical Documents
In consideration of the promises set forth herein, the parties hereto mutually
agree as follows:
1.0 IMPLEMENTATION OF AGREEMENT
1.1 Whenever Buyer elects to procure Parts priced
pursuant to the terms of this Agreement, Buyer shall
issue firm fixed price Purchase Orders on Buyer's
standard purchase order forms incorporating such
attachments and documents set forth in Exhibits B and
C hereto as are deemed by Buyer to be applicable
under the circumstances. Each such Purchase Order
shall set forth the items being ordered, the
quantities to be furnished, the negotiated prices,
and such information or instructions as Buyer may
deem necessary. Each purchase order shall be subject
to seller's acceptance. Seller agrees to comply with
each such Buyer's Purchase Order issued hereunder
subject to the requirements set forth in each such
Purchase Order and this Agreement. Buyer's sole
representative authorized to issue Purchase Orders
hereunder is ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ or any substitute
representative designated in writing by Buyer
(hereinafter "Buyer's Authorized Purchasing
Representative").
1.2 Buyer's Purchase Orders will be identified by number,
and Seller shall reference this number on packing
sheets, invoices, and other documents as required. A
separate invoice shall be submitted for each Purchase
Order unless otherwise specified.
2.0 DELIVERY
2.1 All items ordered hereunder shall be delivered in
accordance with the delivery requirements set forth
on each Purchase Order.
3.0 QUANTITY AND PRICE
3.1 Buyer agrees that it will procure a minimum quantity
as identified in Exhibit A from Seller during the
term of this Agreement. Notwithstanding the
foregoing, Buyer's obligation to procure Parts from
Seller is conditioned upon Seller's ability to
design, qualify, fabricate, manufacture, assemble,
test and in all respects satisfy Buyer's Purchase
Order requirements regarding timely delivery of
conforming Parts. Buyer is in no way obligated to
purchase any inventories (residual or otherwise) that
Seller may establish under this Agreement.
3.2 It is understood and agreed that any estimates
contained in this Agreement or furnished by Buyer are
not minimums, maximums or guarantees, and
authorization of any work shall only be upon the
issuance of Purchase Orders by Buyer's Authorized
Purchasing Representative. Buyer shall have no
responsibility for the accuracy of any estimate and
any reliance by Seller shall be at Seller's sole risk
and expense. Any estimate shall be subject to
adjustment from time to time and such estimate shall
not constitute a change in accordance with the
changes clause contained in the terms and conditions
of this Agreement.
3.3 Unit prices for items covered by this Agreement
are as set forth in a letter from Seller.
3.4 Boeing shall not be obligated to pay Seller any
amount in excess of the authorized Purchase Orders.
3.5 Payment Terms shall be Net 45.
3.6 Buyer's California Resale Permit Number is
SB AB 99-930684.
3.7 Seller agrees that all deliveries shall be FOB origin
except with Buyer requested priority freight
shipments to support unplanned demands and/or
emergencies as instructed and authorized in a
Purchase Order.
4.0 QUALITY ASSURANCE
4.1 Purchase Orders issued under this Agreement shall be
performed in accordance with best commercial
practices.
5.0 ACCEPTANCE
5.1 All goods delivered under Purchase Orders issued
under this Agreement shall be subject to inspection
by Buyer prior to acceptance at such times and places
as directed by Buyer. Except as regards to latent
defects, fraud or such gross mistakes as amount to
fraud, the goods delivered under Purchase Orders
issued under this Agreement shall be considered
accepted by Buyer upon the occurrence of any of the
following conditions:
(a) Buyer makes final inspection of and
gives written notice of final
acceptance,
(b) The termination of a ninety (90) day
inspection period following delivery
of the goods to Buyer, provided that
no nonconformance with any
requirements of this Agreement or
the Purchase Order is found,
(c) Buyer's written approval of Seller's
correction of defects or deviations
from requirements discovered by
Buyer during the inspection process.
5.2 Upon receipt of notice from Buyer, Seller shall
promptly correct all defects discovered during the
inspection process. If Seller fails to promptly
correct such defects, Buyer may, among other things,
(a) have any or all such defects corrected through
other means at Seller's expense, or (b) return the
goods to Seller for the full invoice price plus any
applicable transportation charges.
5.3 The term "latent defects," for purposes of this
Article, are conditions resulting in noncompliance of
goods with one or more requirements of this Agreement
or the Purchase Order which noncompliance was not
discovered during the inspection process.
5.4 Buyer's inspection and acceptance of goods or
approval of data and documentation submitted by
Seller shall not constitute a waiver of any of
Buyer's rights provided in this Agreement or the
Purchase Order and shall not excuse Seller from full
compliance with all requirements of this Agreement
and the Purchase Order.
6.0 RESERVED
7.0 RESERVED
8.0 RESERVED
9.0 CREDIT OFFICE VISIBILITY
9.1 If requested, Seller shall provide financial data, on
a quarterly basis, or as requested to the Boeing
Corporate Credit Office for credit and financial
condition reviews. Said data shall include but not be
limited to balance sheets, schedule of accounts
payable and receivable, major lines of credit,
creditors, income statements (profit and loss), cash
flow statements, firm backlog, and headcount. Copies
of such data are to be made available within 72 hours
of any written request by Boeing's Corporate Credit
Office.
10.0 RESERVED
11.0 LIQUIDATED DAMAGES
11.1 Seller acknowledges that Buyer may require liquidated
damages for late delivery under any Purchase Order
issued under this Agreement. In the event Buyer
requires liquidated damages, the following clause
shall be included in the Purchase Order. Seller
agrees to negotiate in good faith the liquidated
damages amount and the maximum liability for
liquidated damages applicable to the Purchase Order.
"Seller agrees to be subject to liquidated
damages for late delivery, as set forth
below, and further agrees that such
liquidated damages are intended to be
compensatory and do not constitute a penalty
for late delivery. The parties acknowledge
and agree that the losses that would be
suffered by reason of any late delivery
would be difficult or impossible to
ascertain and that the liquidated damages
set forth below represent a reasonable
estimate of those losses. The liquidated
damages set forth below are specifically
applicable to late delivery only. Buyer's
rights and remedies for other than late
delivery are as set forth in this Purchase
Order and as are available at law or in
equity. For purposes of this provision, the
term "delivery" shall mean receipt of
conforming items at Buyer's receiving dock.
If Seller fails to deliver items in
accordance with the delivery schedule set
forth in this Purchase Order, Seller shall
immediately pay to Buyer the following
liquidated damages: $TBD per Part for every
calendar day that the Part is delivered
after the scheduled delivery date up to a
maximum of $TBD under this Purchase Order."
12.0 RESERVED
13.0 PERIODIC REVIEW OF AGREEMENT
13.1 In the interest of maintaining a good-faith,
long-term relationship between Buyer and Seller as
contemplated by this Agreement, Buyer and Seller
shall convene no less than an annual review each
calendar year to discuss the agenda items suggested
below:
1. Seller's and Buyer's past performance
2. Buyer's business projections
3. Possible opportunities for cost savings to both
parties
4. Potential for the extension of the Agreement
5. Other matters as deemed applicable and
appropriate by the parties.
14.0 EXPORT COMPLIANCE
14.1 Information furnished to Seller under this Agreement
may contain technical data as defined in the
International Traffic in Arms Regulation ("ITAR") at
22 CFR 120.10. Seller is advised and hereby
acknowledges that such technical data may not be
exported, disclosed or transferred to any foreign
person, as defined in the ITAR at 22 CFR 120.16,
without first complying with all requirements of the
ITAR (22 CFR 120-130) including requirements for
obtaining any required export authority. Seller shall
indemnify and hold Buyer harmless from and against
any and all claims, liabilities and expenses
resulting from Seller's failure to comply with the
export laws and regulations of the United States.
15.0 ADMINISTRATIVE AUTHORITY
15.1 Changes to this Agreement shall not be binding upon
Buyer except when specifically confirmed in writing
by Buyer's Authorized Purchasing Representative.
Information, advice, approvals, or instructions by
Buyer's technical personnel or other representatives
shall be deemed expressions of personal opinion only
and shall not affect Buyer's or Seller's rights and
obligations hereunder unless set forth in a writing
which is signed by Buyer's Authorized Purchasing
Representative and which expressly states that it
constitutes a change to this Agreement.
15.2 Whenever there is a requirement in this Agreement or
its Purchase Orders for Buyer's approval of plans,
drawings, specifications or similar documents or for
Buyer to participate in any meetings, conferences or
design reviews, such approvals or participations
shall not be deemed or construed to waive any of
Seller's obligations to meet all the requirements of
this Agreement or its Purchase Orders.
16.0 ASSIGNMENT AND SUBCONTRACTING
16.1 Neither this Agreement, nor any interest herein, nor
claim hereunder may be assigned or delegated by
Seller, nor may this Agreement be further
subcontracted by Seller without prior written consent
of Buyer.
16.2 Notwithstanding the foregoing, Seller may, without
Buyer's consent, assign monies due or to become due
hereunder provided Buyer shall continue to have the
right to exercise any and all of its rights
hereunder, settle any and all claims arising out of,
and enter into amendments to this Agreement, without
notice to or consent of the assignee. Buyer shall be
given written notice of any assignment and all
invoices shall refer to the assignment.
17.0 CHOICE OF LAWS AND DISPUTES
17.1 This Agreement shall be construed and the relations
between the parties determined in accordance with the
laws of the State of California without giving effect
to California's Conflict of Law rules.
17.2 Buyer and Seller agree to make a good faith attempt
to settle any dispute arising under or related to
this Agreement without resort to legal action. If
such good faith efforts fail, the parties may
litigate such dispute before any court of competent
jurisdiction in the county of Los Angeles,
California. Pending resolution of any such dispute,
Seller shall proceed diligently with the performance
of this Agreement in accordance with Buyer's
direction concerning the subject matter of the
dispute.
18.0 GENERAL
18.1 The invalidity of any provision of this Agreement
shall not affect the validity of the other provisions
of this Agreement which can be given effect without
the invalid provision. Either party's failure to
insist, in any one or more instances, upon the
performance of any term of this Agreement shall not
be construed as a waiver or relinquishment of that
party's right to such performance or to future
performance of such a term or terms, and the other
party's obligation in respect thereto shall continue
in full force and effect. The headings in this
Agreement are included for the convenience of the
parties only and shall not be considered or relied
upon in the interpretation of this Agreement.
19.0 ORDER OF PRECEDENCE
19.1 Conflicting or inconsistent provisions of this
Agreement, if any, shall prevail in the following
descending order of precedence:
1. Buyer's Purchase Order implementing this
Agreement,
2. This Agreement,
3. Buyer's Purchase Order Attachments incorporated
by reference into this Agreement,
4. Technical Documents incorporated by reference
into this Agreement
20.0 DISTRIBUTORSHIP
20.1 Seller hereby appoints Buyer, subject to the terms
set forth herein, as sole distributor for the direct
and indirect sale of the Parts during the term of
this Agreement. Buyer hereby accepts such appointment
on behalf of itself and its resellers.
20.2 Buyer has no obligation under this Agreement to
promote the sale or stimulate interest in the Parts
or to sell any minimum quantity of Parts under this
Agreement.
21.0 PROPRIETARY RIGHTS AND DISCLOSURE
21.1 Seller shall not use or disclose, without Buyer's
prior written consent, any tools or other items or
drawings, specifications, technical information,
computer software, or other data which have been
specially designed for Buyer in connection with this
Agreement or furnished by Buyer.
22.0 MODIFICATION TO GP-1
22.1 Article 8, Warranty, in GP-1, The Boeing Company
General Provisions Fixed Price Contract, is deleted
and replaced with the following:
"Seller warrants that all Goods shall meet the
specifications set forth in Exhibit C hereto and
shall be free from defects in materials and
workmanship for a period of twelve (12) months from
the date of delivery. In the event that any
nonconformance or defects shall appear during such
twelve (12) month period, Seller shall evaluate the
deficiency and, at its option, shall either make the
required repairs, replace the Goods, or have the
repairs made by Buyer at Seller's expense. Upon
receipt of any shipment, Buyer shall perform
inspection procedures and shall notify Seller
promptly, but in no event later than sixty days after
the date of delivery, of any nonconformance, defect
or damage to any of the Goods received which a
reasonable inspection would disclose.
EXCEPT AS EXPRESSLY SET FORTH IN THE PRECEDING
PARAGRAPH, SELLER MAKES NO REPRESENTATIONS OR
WARRANTIES WITH RESPECT TO THE PRODUCTS, EXPRESSED OR
IMPLIED, INCLUDING, WITHOUT LIMITATION, THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND OF FITNESS FOR A
PARTICULAR PURPOSE. IN NO EVENT SHALL EITHER PARTY BE
LIABLE FOR ANY LOST PROFITS OR FOR SPECIAL, INDIRECT
OR CONSEQUENTIAL DAMAGES.
Notwithstanding the above, claims by Buyer against
Seller for contribution toward third party injury,
damage or loss are not limited, waived, released or
disclaimed."
23.0 INTEGRATION
23.1 This Agreement constitutes the complete and exclusive
statement of the terms of this agreement between
Buyer and Seller and supersedes all prior
representations, understandings, and communications
relating hereto.
IN WITNESS WHEREOF, Buyer and Seller have executed this Agreement as of
the last date shown below.
BOEING SATELLITE SYSTEMS, INC.
By: /s/ Ali Asghrzadeh
------------------------------
Ali Asghrzadeh
Title: Program Manager
Date: September 16, 2004
COPYTELE, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman of the Board and
Chief Executive Officer
Date: September 16, 2005
EXHIBIT A
PARTS LIST
Buyer agrees that it will procure a minimum of ten (10) of each Part identified
in Exhibit A from Seller during the term of this Agreement.
PART NO. DESCRIPTION
DCS-1400-D Docker Encryption Device
USS-900T Satellite Fax Encryption
USS-900TL Landline to Satellite Fax encryption
USS-900WF Satellite and Cellular Fax encryption
USS-900WFL Landline to Satellite and Celluar Fax encryption
EXHIBIT B
PURCHASE ORDER ATTACHMENTS
Buyer shall incorporate in Purchase Orders issued under this Agreement such
Purchase Orders set forth below as are deemed by Buyer to be applicable under
the circumstances. Buyer may incorporate such additional provisions as Buyer may
reasonably deem necessary in order to comply with the provisions of the contract
or higher-tier subcontract between Buyer and its customer.
ATTACHMENT TITLE DATE
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GP-1 The Boeing Company General Provisions 5/1/02
Fixed Price Contract
4007 Additional General Provisions 6/1/03
EXHIBIT C
TECHNICAL DOCUMENTS
TITLE DATE
----- ----
Technical Specification DCS-1400-D 4/01/2004
Technical Specification USS-900T 9/15/2004
Technical Specification USS-900TL 9/15/2004
Technical Specification USS-900WF 9/15/2004
Technical Specification USS-900WFL 9/15/2004